You can always rely on Qantas to shaft its customers and abuse its market power and the Mangy Roo has done it again with its latest Frequent Flyer restructure, as Pemberton Strong explains in these two missives to subscribers. Read to the bottom as we want plenty of reader reaction.

Pulling a frequent flyer shifty

From the second November 25 sealed section

Last week we warned Qantas was trying something nasty and hurtful to customers this week. We though it involved booking fees and the like, but it’s even worse than that.

Qantas has decided to restructure its frequent flyer program, ostensibly to make it easier to fly, but in reality, making it harder by increasing the number of points needed for most flights – the SMH reports here.

Sneaky huh? And this from one of the world’s most profitable airlines that has spent the past four months terrorising most of its staff in enterprise bargaining agreement discussions, and training strike breakers in case of a strike at Christmas.

International business and first class passengers will be hurt most of all by the changes. From May next year flights under 600 miles, or around 965 kilometres or less, will be available for fewer flights (wow, let’s fly to Canberra!).
But there will be no upgrades on discount flights, fees apply for speaking to a person to handle any claims and upgrades cannot be confirmed in advance for international flights. From today points can be given to a family member and points can be bought once a year to top up.

But frequent flyers point out that many of these changes are illusory. The removal of upgrades on discount flights means that to use you frequent flyer points, you effectively have to pay full fare if you want to fly in a better class, or buy a discount fare and travel in economy.

Depending on when you book, the difference can be thousands of dollars and tens of thousands of points. Anyone booking well ahead (a year for example) for a holiday using frequent flyer points overseas will have to settle for what they book and chances of an upgrade will depend on what’s available when you get to the airport.

Business class (and first class where available) are heavily booked on the major routes to Europe and the US, so effectively it’s in cattle class, or pay for business with your points, if there’s a seat available.

Qantas likes to call this rebalancing. Ahh yes, the great corporate weasel word, rebalancing. It means titling the revenue flow back to the company and cutting the deals for customers.

“No one likes prices going up, but we had to correct it,” Qantas head of marketing Martin McKinnon was quoted as saying in the absense of CEO Geoff Dixon who left this particularly shifty announcement to his minions.

One way flight redemptions start in May when the amount of points needed for those flights under 695 kilometres drops. This will discriminate against people living in remote areas of Australia, such as Hobart, Perth, all other parts of Western Australia, the Northern Territory and anyone from Sydney or Melbourne looking to go to the west or north of Australia.

The tourism industry is not going to like it. And there’s no use flying Jetstar either because it doesn’t take points. This is a mealy-mouthed rip off of the worst kind by Qantas, which is using its near monopoly status to effectively devalue the worth of existing holdings of frequent flier points.

One platinum frequent flyer friend of Crikey says her points have been cut by between 20% to 50% depending where she and her family want to go next year.

Qantas is a near monopoly simply because its frequent flyer program has been going so long and so many people have points locked up. They are not transferable and you can’t take them to another airline.

The banks have also made it much harder to earn points, Virgin Blue doesn’t have a program.

This is another case of Qantas’ contempt towards its customers! Of course, the board and senior managers basically fly very cheaply or pay nothing at all.

Air NZ shows up Qantas

From the November 26 sealed section

If ever there was confirmation why “no” was the right answer to the recent Qantas attempt to snuggle up and put its foot on Air New Zealand, it’s in the recent changes to the respective frequent flyers programs.

In short, Qantas has stuffed most of its frequent flyers as reported yesterday in the Crikey sealed section and in the media, while Air New Zealand has gone the other way, actually improving the lot of around 76% of its program’s members, according to reports from New Zealand.

Points under the Air New Zealand program can be used for any seat on any flight. Quite a contrast – check out the details here. Of course Air New Zealand is still struggling to make headway, although there’s no real danger of it going broke, as there was two years ago.

But Qantas is merely flexing its monopoly muscle and exploiting its frequent flyers to the point where most have lost 20% of the value of points held.

Qantas saves money and the respective managers involved, all the way up to CEO Geoff Dixon, will receive a benefit by way of bonuses from the lower cost of the program to the company. And it can do it with impunity because there’s no real competition in Australia.

And it doesn’t stop there. Qantas frequent fliers wishing to travel to say the Gold Coast, the Sunshine Coast, North Queensland or even Tasmania are finding they are being flicked to Jetstar, where they have no rights whatsoever and the points they have used to buy their seat or seats have effectively been wasted.

All this shows the utter silliness of that finding of the Australian Competition Tribunal which gave the green light to the Qantas-Air New Zealand alliance, based god knows on what basis, except innocence and remoteness from the real world of the marketplace.

It would have effectively allowed Qantas to deny Air New Zealand the right to change its program to the benefit of its members. No wonder the Kiwis were suspicious of the alliance proposal and rejected it.

They have a better understanding of the monopolistic tendencies of the Cranky Roo and its management, than we Aussies obviously have.

CRIKEY: We love reader feedback at Crikey so if you’ve had a Qantas experience worth repeating, email it through to boss @crikey.com.au.

Peter Fray

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